Lenders May Create Bitcoin Rivals, Says New Zealand Bank Group

By David Fickling -
May 5, 2013

Commercial banks may create digital
currencies to rival Bitcoin, the virtual money whose U.S. dollar
value collapsed by 46 percent in 24 hours last month, the head
of New Zealand’s banking lobby said today.

Banks noticed the low cost of international Bitcoin
transfers, and some may look to introduce competitors as a cap
on issuance constrains the digital currency’s supply, Kirk Hope,
chief executive officer of the New Zealand Bankers’ Association,
said according to the e-mailed transcript of an interview with
TVNZ television.

“If it’s not Bitcoin it might be some other type of
digital currency that could come into play,” Hope said. The cap
on Bitcoin issuance, which limits supply to about 21 million
units, “doesn’t mean that some other player couldn’t come into
the market, and, you know, that might be a bank.”

Created four years ago by a person or group using the name
Satoshi Nakamoto, Bitcoin is a virtual currency that can be used
to buy and sell a broad range of items -- from cupcakes to
electronics to illegal narcotics. The surge in a Bitcoin’s value
has made millionaires out of people who loaded up on them early
on, many of them self-described libertarians drawn by the idea
of a currency that exists outside government control.